9.1 Process flow-chart
The process flow for D1 is created to indicate the high importance of Control Tower’s involvement in all process stages. The roll of Control Tower is centralized in all operation processes and the figure below shows the information flow between all parties involved in the whole supply chain.
Figure 1. Process flow-chart (T.Vaahtera, personal announcement, 11.4.2013)
9.2 Inbound logistics
The amounts of inbound shipments are determined by Valmet’s material planning division. The calculations are done according to Daimler’s sales forecasts. The quantities are determined according to the cumulative vehicle orders and Daimler’s sales forecasts. Forecasts do not however represent any authorization to ship materials. The Material Control division at Valmet sends the Delivery Schedule to the suppliers and to Control Tower on a weekly basis, if not agreed otherwise. If a new Delivery schedule is made, it does replace the previous one. However the old schedule is valid until suppliers receive the replacing one. When Valmet has placed the order to the suppliers they must wait for confirmation from VATG. When Valmet receives confirmation, does the liability no longer lie with Valmet and the supplier is responsible for ordering collection transportation for the shipment. (SOP manual 2013)
Control Tower
The Delivery Schedule from Valmet is based on current inventory values, transportation lead times, package sizes and cumulative vehicle orders. The part-specific delivery dates and quantities are mentioned in the Delivery Schedule as well as the latest Dispatch Note number and the cumulative numbers from the beginning of calendar year. The delivery schedule is sent from Valmet’s ERP system to the suppliers as an EDI message. EDI communication increases the order process synchronization. The quantity of goods to be collected and the pick-up times are specified on the delivery schedule. The supplier is obligated to accurately provide the parts according to the Delivery Schedule. If the supplier has difficulty to fulfill the request or has not received a new Delivery Schedule for any reason, is the supplier obliged to inform Valmet’s Materials Control division immediately. When the suppliers have received the delivery schedule, they must place the transportation order to Control Tower latest by 12.00 am the day before collection day. It is important to understand that the date in the Delivery Schedule is the shipment date and not the arrival date at Valmet. The suppliers must inform Control Tower immediately whenever the actual shipments differ from the booking. (SOP manual 2013) Control Tower receives all transportation orders from the suppliers. The suppliers cannot place the order directly from Valmet; it must always go first through Control Tower. Every supplier has been assigned with a contact person from Valmet material planning division. The supplier, the material planner and the personnel at Control Tower will co-operate together to establish reliable communication ways and to establish a smooth information flow. After an incoming order, Control Tower informs the transport company who is responsible for the specific pick-up area (DSV, Polar Logistics or Nybrok). The booking request is inserted to VATG and afterwards all information concerning the booking must be visible for transport companies through VATG. Control Tower has made a requirement to Valmet that VATG has functions that transfer the booking information automatically to transport companies own ERP-systems, in order for the transport companies to be able to make the transportation bookings required. (SOP manual 2013)
9.2.1 Collection orders from suppliers
The suppliers must co-operate with the transport companies in a way that complies with all relevant instructions from Valmet. Valmet is responsible of defining the transportation method for each supplier. Co-operation between the suppliers and Control Tower is very important and the level of co-operation between all parties shall result in 100% on-time shipments. All the dates and Delivery Schedule volumes agreed have to be observed on all accounts regardless of public holidays, religious holidays and country-specific limitations.
The suppliers are obligated to inform Control Tower immediately if the booking data has changed from the original booking. All parties must strive to relate proactively to their core task in order to improve the efficiency and to create visibility in the supply chain processes. The suppliers have been instructed to always make the transportation booking through Control Tower and let Control Tower arrange further transportation. It is strictly forbidden that the supplier contacts other carriers directly for booking requests or that they hand over the shipment to other freight carriers, if not separately agreed otherwise.
9.2.2 Dividing orders
Currently VATG is not yet available for operation so the booking process is following: All transportation bookings are sent from the suppliers to Control Tower. Control Tower divides the bookings and assigns them to the right transport company. The responsibility is divided as following: If bookings request has pick-up from Germany from the postal code beginning with 2, 3, 4 or 5 has Nybrok the responsibility to collect the shipment. DSV handles collection from the remaining postal codes within Germany. DSV is also responsible for arranging transportation for import shipments from Southern and Western European countries e.g. France, Switzerland, Belgium, The Netherlands, Italy and Spain. If the booking comes from Eastern Europe e.g.
Hungary, Poland, Czech Republic or Romania, is Polar responsible for the collection of the shipment. Summarized can it be stated that Control Tower forwards transportation bookings and also arranges all transportations that fall
under the responsibility of DSV. The booking information is inserted to DSV’s CargoLink and forwarded to DSV partners. During operations and transport co-ordination without VATG is it very important for all parties to cooperate and strive for a seamless goods flow for the mutual benefit. (SOP manual 2013) When the supplier has received an order from Valmet, the supplier makes a booking for the collection of the shipment. The booking request will be sent to Control Tower from the suppliers. Control Tower is the communication point between Valmet and the suppliers. The transportation planning is done at Control Tower according to the information sent from the suppliers. Control Tower forwards the planned transport information to Nybrok and Polar Logistics and they all co-operate with planning of the transportation, depending on the pick-up area and the transport company who is responsible of the transport area. Transport Company then sends information about a shipment that must be collected to the driver who is ordered to complete the pick-up. The driver will receive relevant information about the loading places from the Transport Company. (SOP manual 2013)
9.2.3 Pick-up from suppliers
The transportation unit must arrive at the supplier’s location within the agreed timeframe stated on the booking request. The driver is given specific orders from where to collect the shipment. When the driver arrives to the loading place he must prepare the transportation unit ready for loading. Loading is carried out according to the rules and requirements of Valmet and Daimler. The picture below on page 41 shows how the goods can be loaded in a trailer. The supplier is responsible of sending parts exactly according to the content of the call-off from Valmet. If the pick-up falls under DSV’s responsibility, Control Tower does make the transportation planning, deciding if the shipment will go through a terminal first or if it is a direct pick-up. The supplier must ensure that there are no wrong deliveries, meaning that the content of the packing unit does not correspond to the writing on the material tags. There cannot be any delays due to short deliveries or to non-deliveries and over-deliveries, meaning deliveries
without a delivery schedule or excess deliveries in terms of quantity. Every possible supply bottleneck, which has an effect on dates or volumes, has to be communicated to the respective Materials Control department. The suppliers are obliged to inform Valmet Materials Control about the possible production shut downs at supplier facilities as soon as such information is available. Valmet maintains the right to return the non-conforming material at the Supplier’s cost.
(SOP manual 2013)
Picture 4. Loaded trailer ( DSV 2013)
9.2.4 Loading
The shipment must be ready for loading at 09:00 AM local time on the scheduled pick-up date. Deviations from the schedule must be mutually agreed between Daimler and Valmet. To avoid disturbance in the traffic co-ordination must the precise consignment measurements and quantity be notified by the supplier when sending a booking request. The driver is responsible for securing the cargo properly and using correct lashing equipment during loading. It is also on the driver’s responsibility to check that the consignments have been properly packed. The lashing instruction from Valmet is attached in the drivers’
handbook. The supplier is obligated to load the transportation unit within a time frame agreed with Control Tower. If no superseding written agreement exists, is the window of loading-time maximum two hours. (SOP manual)
After the shipment departure from the Supplier’s site, an ASN must be sent to Valmet as an EDI notification. The ASN contains detailed information about the pending delivery and must include at least the following information: Supplier number, part numbers (Daimler), quantities, Dispatch Note number, pick-up date and transport unit number. It is a demand from Valmet that the suppliers send the ASN within one hour after departed shipment. The information in the ASN contributes to automated acceptance of the goods at Valmet plant. The invoicing processed will also be automated with the information send through ASN. Valmet depends that the data from the supplier is reliable and accurate.
(SOP manual 2013)
9.3 Orders for sequenced-parts (JIS)
Just in sequence means that the parts are delivered to Valmet factory in a specific order. Valmet, suppliers, Control Tower and the transport companies are working in co-operation to sequence the deliveries of right parts for manufacturing, right as they are needed on the production line. JIS components are delivered in a specific order and they are practically discharged directly to the assembly line, without first being stored in the warehouse. Valmet specifies the order of the parts and it is highly important the right parts are delivered to Valmet when they are needed. The supplier is responsible of labeling consignments consisting of JIS components with the vehicle´s production number. It is important to establish from the beginning smooth and flexible JIS delivery procedures, in order to meet the increasing deliveries of JIS-parts during the production ramp-up. (SOP manual 2013)
The order for sequenced parts is made every day. This differs from standard part orders which are made once a week. Upon the receipt of a vehicle order from Daimler, a shipment schedule will be sent electronically to the suppliers. A vehicle-specific module list will be transmitted of the queue sequence for the assembly. The posted date of the module list correlates to the start date at the body shop at Valmet. It defines the daily start-point for the queue sequence.
(SOP manual 2013)
9.3.1 Booking of transportation
Control Tower receives all incoming booking requests and it is on Control Tower’s responsibility to delegate bookings to the correct transport companies.
The transport company is responsible of making the booking based on the information forwarded from Control Tower. When the transport company has made bookings to subcontractors, Railway Company or ferry operators and received confirmation are they to inform the status to Control Tower without delays. When VATG is taken into use, the booking information must be inserted in the transport company’s own ERP-system in order for the booking information to be visible for all parties in VATG. (SOP manual 2013)
9.3.2 Rail transportation
If the trailer is being transported by rail, the driver takes the loaded unit to the railway station according to the given instructions. The driver is responsible for leaving the trailer at the correct place on the railway company’s departure lot and report the trailer to the rail way freight clearance. After the driver has carried out the trailer drop-off, he must report the status to the transport company responsible for assigning the transportation. The transport company who has arranged the transportation, reports the status of the shipment to Control Tower. Control Tower keeps track of the incoming and outbound transportations and reports further to Valmet if there is any disturbance in the delivery schedules. (SOP manual 2013)
9.3.3 Sea transportation
If the transportation unit is taken to the harbor for sea transportation, the driver must leave the trailer at the correct lot for departing units. The driver must inform the status directly after the drop-off to the transport company assigning the transportation. Due to the high level of material flow inbound and outbound from Valmet factory in Finland, a ferry connection will be established between Uusikaupunki and Bremerhaven. The ferry has been planned to depart once a week in the beginning of the production and later during the production ramp-up
twice a week. The ferry connection will be operated by Finnlines and will also be available for other carriage than just Valmet goods. The picture below shows the loading of M/S Finnsun in Uusikaupunki.
Uusikaupunki Harbor will however not be the only harbor used for inbound and outbound transportation. The trailers will also arrive to and depart from other ports in Finland e.g. Helsinki, Turku and Naantali. Before the established ferry connection in Uusikaupunki is the route Travemünde-Helsinki used constantly for incoming trailers. Trailers will also arrive to Turku harbor and occasionally to Naantali. (SOP manual 2013)
When the trailers start to arrive directly to Uusikaupunki, is the delivery plan of trailers to Valmet factory area made according to the Valmet’s trailer priority list.
Control Tower receives the priority list from Valmet who checks the list, comparing it to the incoming trailers on the ships loading manifest. Centralized transport co-ordination from the Uusikaupunki port to Valmet factory area is made according to the plan done by Control Tower based on Valmet’s trailer priority list. (SOP manual 2013)
Picture 5. M/S Finnsun loading in Uuusikaupunki (DSV 2013)
If the trailers arrive to other ports in Finland shall following procedures be carried out: The drivers who is collecting must be informed about arriving trailers and their registration numbers. The driver then picks up the trailer from the harbor at the right time according to the given information from Control Tower. The driver hauls the unit to Uusikaupunki and delivers the trailer to Valmet factory area at the time agreed. At delivery to Valmet factory area is the responsibility of the unit turned over to the yard operator. When incoming trailers arrive to Valmet factory area, must the driver leave the trailer to the correct lot and inform the transport company about the drop-of. At this point the responsibility is turned over to yard operator. Yard operator takes the trailers to the right unloading place at the right time according to the information given by Control Tower. (SOP manual 2013)
9.4 Outbound logistics
Outbound shipments consist of ready assembled vehicles and packaging material from Valmet to suppliers or terminals in various locations in Europe.
The delivery of ready assembled vehicles and packaging must be considered as two different transportation processes.
9.4.1 Outbound packaging material
The supplier is obligated to order packaging material according to Valmet’s instructions. The delivery terms, locations and frequency in delivery times are named by Valmet. The supplier makes all orders for packaging material themselves. The orders are sent directly to Valmet and Valmet confirms the order. Control Tower then receives the data and inserts the information about packaging material orders to Partner Web and Valmet confirms the order again.
In case of an incomplete booking Valmet has got the right to modify the booking by adding or removing items. (SOP manual 2013)
After the booking has been confirmed, Control Tower organizes transportation for the packaging material or forwards it to the correct Transport Company depending on whose geographical responsibility area is in question. The
transport company receiving the booking is responsible for organizing transportation for the outbound trailers from Valmet factory in Uusikaupunki.
(SOP manual 2013)
The order placed by suppliers shall include the correct ship-to-address for the packaging material. All orders of packaging material must be inserted in Valmet’s Partner web. Partner Web is Valmet’s extranet for business partners and contains tools for continuous operations improvements. Partner Web accounts will be implemented for the Suppliers by Valmet and the usage of Partner Web will not create any additional costs to the users. All information in Partner Web is secured and every party can only see the data they have an authorization to. Every organization has a main user authorized by Valmet, for handling internal user management. If the supplier orders re-usable packages, containers, totes, etc, must the order be placed using Partner web’s “Packaging request function”. Valmet has the right to monitor the Suppliers bookings and Packaging orders as well as the way of handling the Packaging material at the Suppliers location. Valmet requires and expects the suppliers to make an inventory of the standard packaging material every four months, without any additional notification. The inventory results must also include all damaged material. The amount and type of damaged materials must be reported to Valmet’s personnel. Inventory results can be inserted in Partner Web. (SOP manual 2013)
All transport companies have also got packaging material in their terminals close to the suppliers. The terminals who are storing packaging material have pre-set order points. When the stock levels hit the order points, orders for replenishment must be placed. The terminals have stored many different types of packaging so that they are able to provide the suppliers with any kind of packaging in small amounts. There are however some types of packaging material that are only stored at Valmet and these packaging’s must be transported directly to suppliers upon an order. DSV has packaging material stored in Schwieberdingen terminal, in Stuttgart. They send Control Tower a
weekly report of the inventory levels of the packaging material. (SOP manual 2013)
Control Tower receives transportation booking from suppliers and completes the transportation planning. Control Tower informs Transport Company about departing trailer from Valmet factory area. The transport company responsible for the outbound booking shall book a ferry place and other needed transportation meant to deliver the trailer to its destination. (SOP manual 2013) 9.4.2 Delivery of ready built vehicles
The transportation of ready built cars starts with deliveries of the cars manufactured during the pre-series production. The transportation process itself will be the same during serial production. Valmet informs Control Tower when a lot of the ready produced cars are ready for transportation. Control Tower must make bookings for the ready vehicles for every transportation mode used from end to end, including ferry, train and road transportation. (SOP manual 2013)
The transportation of ready built cars starts with deliveries of the cars manufactured during the pre-series production. The transportation process itself will be the same during serial production. Valmet informs Control Tower when a lot of the ready produced cars are ready for transportation. Control Tower must make bookings for the ready vehicles for every transportation mode used from end to end, including ferry, train and road transportation. (SOP manual 2013)